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At a standing-room-only town hall meeting in January at Sierra Nevada College in Incline Village, Nev., residents voiced passionate opinions on a question that has chafed the Lake Tahoe area for decades: What’s the best way to house the hordes of vacationers who descend on the lake year-round?

“They come and party and leave trash in the streets, and take housing away from the locals,” a longtime resident said. “But I and many others couldn’t afford to live here unless I rented out my spare bedroom.”

“Plus, they bring in millions in tax dollars,” a woman added.

Such is life for Tahoe locals: The crush of tourists can often feel overwhelming, but it is also the lifeblood of the economy. The region, which encompasses five counties in two states, sees around 3 million visitors a year.

At issue that evening was the management of short-term rentals — units leased for 30 days or less at a time. Think ski cabins, lakeside lodges, vacation condos and the plethora of other housing options available on sites such as Airbnb and VRBO. STRs, as they’re known, are a crucial source of income for residents and municipal governments in an area where tourism is the dominant industry, but they’ve saddled communities with all sorts of nuisances: illegal parking, excessive noise, wild partying, trash.

“Opinions of STRs vary dramatically,” says Jeff Loux, town manager of Truckee. “We hear the spectrum from ‘STRs are the problem’ to ‘You can’t possibly ban these, they are the lifeblood of the economy.’”

Perhaps more consequential to a region where the median annual income hovers around $45,000, STRs stress the already limited housing supply of Lake Tahoe — where 65 percent of homes sit vacant most of the year and locals are increasingly struggling to find affordable housing.

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The discord over STRs in Tahoe has been swirling for a decade, since the rise of rental services. But the issue was reignited last fall when voters in South Lake Tahoe passed Measure T, an ordinance designed to phase out STRs by 2021. The measure passed by a mere 58 votes — less than 1 percent of votes cast — but the message became clear: South Lake’s citizenry is fed up with the lack of regulations on STRs.

While Measure T represents the most extreme example of action on STRs, similar debates are happening all around Lake Tahoe, exemplifying the tightrope walk of attracting tourism and maintaining a town’s unique character.

“It is a balancing act,” Loux says. “On the one hand, this is a resort community where people have rented their properties on a short-term basis for decades. … On the other hand, we are a community, not just a resort.”

To help ground future decisions in data, a report on the impact of STRs is soon to be released by the Mountain Housing Council of Tahoe-Truckee, a coalition of 28 business and community groups including ski resorts, governments and realty boards. Due out this month, the report focuses on the Truckee/North Tahoe region, which includes the majority of Tahoe’s west shore, the north shore going east to where it borders Nevada, and up to Truckee, 15 miles north of the lake.

Seana Doherty, project manager for the council, hopes the study will serve as a turning point for policymakers, as it will sharpen the focus on the scope of the issue. For example, the council found that 13 percent of the estimated 38,801 housing units in Truckee and North Tahoe are being rented on a short-term basis. Doherty believes this number is significantly lower than people would have assumed, indicating that the impact of STRs may not be as large a part of the housing problem as people imagined.

For now, the debate remains hotly contested, as different areas of the lake take different approaches to management. Here is how the issue is shaping up around the lake.

South Lake Tahoe

Situated adjacent to a handful of tourist-friendly casinos just over the state border in Nevada, South Lake Tahoe is the largest city on the lake, with 22,000 residents.

It’s also a hotbed of STR controversy; Measure T is the most aggressive attempt to rein in short-term rentals in the region. Supporters believe the measure could add to the supply of long-term rental options. Detractors worry about stymieing cash flow to the city, including an estimated $4 million in annual tax revenue.

The measure seeks to reduce occupancy limits for STR units and eliminate them completely by the end of 2021 outside the tourist core, which runs along Highway 50 from Ski Run Boulevard to the Nevada border. There are about 1,400 units outside the tourist core and 400 within it. Measure T grants full-time South Lake Tahoe residents an exemption to the new rules.

Before Measure T, the city had taken other measures to curb unchecked STR growth. In October 2017, for example, the city put a moratorium on vacation rental permits, and at the end of that year enacted heavy fines for partying, illegal parking and other nuisance issues.

Still, some residents felt that wasn’t enough. In late 2017, two South Lake Tahoe citizens started to circulate a petition to get Measure T on the ballot. The Tahoe Neighborhoods Group formed to back it, and in April 2018 it submitted the necessary signatures to get it on that year’s ballot.

But it appears the fight is just beginning. In December, the South Lake Tahoe Property Owners Group filed suit against the city, saying the measure is unconstitutional and unenforceable and infringes on property owners’ rights. The measure also took a blow when, on Dec. 24, an El Dorado County judge put a temporary stay on the new occupancy limits that were set to take immediate effect, citing concerns over how it would affect the busy holiday season.

As a result, it’s too early to tell whether the city will see a significant downturn in STRs this year.

Placer County

Stretching from Tahoma on the West Shore of Lake Tahoe to Kings Beach on the border of Nevada, eastern Placer County encompasses a diverse range of neighborhoods as well as the ski-area communities of Squaw Valley and Northstar. It has about 2,500 STRs, according to the council’s study, which brought in an estimated $10.6 million through transient occupancy taxes in 2018.

To manage the yearly uptick in STR usage, the county is working on reducing nuisance issues and increasing enforcement. In December, Placer updated its STR ordinances, including requiring a designated local contact within 50 miles for renters to respond to complaints; a good neighbor “fact sheet” to be posted on the property about issues including parking, trash and noise; safety information; and more.

However, policymakers there appear less interested in limiting landowners’ ability to rent, citing the wide range of services that the occupancy taxes fund, which include the Sheriff’s Department, public transportation, tourism marketing and more.

Jennifer Merchant, Placer County’s deputy CEO for Lake Tahoe, says she is working to address the housing situation but doesn’t believe something akin to Measure T is the solution. “Prohibiting STRs outright would not necessarily yield the deserved result in improving our housing shortage, but it would have a negative impact on the local economy,” Merchant says.

Placer County has carried out surveys with second-home owners and looked at similar mountain towns outside of Tahoe. The results haven’t convinced Merchant that limiting STRs would open up more long-term housing. “I haven’t seen any empirical data that demonstrates a significant impact on long-term rentals that directly correlates from regulating STRs,” she says.

Truckee

The Nevada County town, with 17,000 residents and an estimated 1,700 STRs, is juggling a plethora of housing and commercial developments and upcoming changes to the size and fabric of the town.

For example, a development is essentially doubling the size of Truckee’s downtown, including affordable housing units. A project is also in the works to build 137 deed-restricted, prefabricated housing units near Truckee’s downtown.

A long-standing STR issue here: Some renters don’t register their properties. That means not only that the city doesn’t collect taxes on those units but also that the scope of the STR presence in Truckee is unknown to city leaders.

To address that issue, in June 2016, Truckee was one of the first five cities in the nation to hire a company called Host Compliance to identify STRs and help local officials register and track them. The company now has more than 150 clients around the country, including Napa, Carlsbad (San Diego County) and Jackson Hole, Wyo. Truckee and Placer County are both now estimated to have a 90 percent registration rate.

Gathering feedback from the community is also a priority. Town Manager Loux says Truckee leaders are planning a series of community workshops to hear residents’ concerns and discuss affordable housing.

“The issue is a multifaceted one that I believe will need to find a balance between market forces and free enterprise and policy (and ultimately regulation) aimed at helping to mitigate potential negative impacts to our local long-term housing stock,” Truckee Mayor David Tirman wrote in an email.

Looking ahead

How the short-term-rental issue develops is tough to predict. What’s clear is that civic leaders and planners around Lake Tahoe are paying closer attention than ever to the issues associated with STRs and gathering data to make more informed policy decisions.

“The best step for STRs is to ground ourselves in facts,” says Stacy Caldwell, the CEO of the Tahoe Truckee Community Foundation, one of the partners of the Mountain Housing Council. “We know STRs are controversial, and across all the questions related to STRs, I think it’s a ‘yes and’ type of answer. As a community we have to decide where to put our energy.”